City jobs, services and booming property prices are the least of the worries for Queensland's small country towns.

Their prosperity hinges on having young, creative citizens who tolerate difference, own their homes, are well-travelled, educated and allow new leadership, a new research report shows.

Innovation in Rural Queensland - Why some towns thrive while others languish, a joint report with the Department of Primary Industries and Fisheries, was authored by UQ Business School senior research fellow Ian Plowman.

For his research, Mr Plowman visited eight small country towns across the State with populations ranging between 600 and 10,000.

One of his 34 recommendations is that nobody should hold a civic leadership position, whether it be mayor or show society president, for more than one term.

"Leadership is a two-edged sword. While it is an act of civic responsibility, it is also an act of denying someone else an opportunity to gain civic experience," Mr Plowman said.

He said the idea of rotating leadership dated back to the origins of democracy in Athens where leaders were unpaid and did not hold any position for any longer than 12 months.

"So-called modern democracy is a very poor version of that," Mr Plowman said.

"Rural towns are frequently viewed as fiefdoms for Chief Executive Officers and mayors who are incumbent."

Using Census data, surveys and interviews, Mr Plowman found that people and their attributes made a town innovative, not their size, economic base or geography.

The most innovative town, with a population of 3000, had the lowest proportion of leaders, was less inclined to seek government funds and had the highest proportion of people who had chosen to move there.

"Many towns are not innovative because of the lack of permission for innovation within them," Mr Plowman said.

"So towns with incumbent leadership inhibit innovation and creativity and cause the creative people who might have been in the town to leave.

 "Towns become increasingly homogenous if they`re not giving support to people who are in any way different."

Stagnant towns had a bigger rental market with some tenants renting for 30 years as they were not ready to invest in the town.

"When people invest in bricks and mortar, they also tend to invest socially, and this is what is happening in most innovative towns," Mr Plowman said.

Towns were rated on their degree of innovation or "innovativeness" according to 16 key criteria such as availability of goods and services, technology, experts and civic management, promotion and participation.

An innovative town was not automatically a successful one, but the towns that met this criteria more positively had higher energy levels, faster growth and better self-images.

Mr Plowman, also a community and organisational psychologist, was seconded for the report by the Queensland Department of Primary Industries.

He is completing his doctorate in innovation in organisations at the UQ Business School and is conducting similar research into innovation in primary industries.

The NSW Farmers Federation was so impressed by Mr Plowman's methodology it was replicated by the organisation for its own report into 60 country towns. Mr Plowman's report was funded by a $68,000 Australian Research Council (ARC) grant.

More Information: http://www.dpi.qld.gov.au/business/14778.html